Tuesday, December 18, 2012

F-35: When compared to the alternatives, it is still the best option

Although already nearly 15 years old, Boeing’s fourth generation F-18 Super Hornet is the only serious rival to Lockheed Martin’s fifth generation F-35 Lightning. But as argued by the National Post’s John Ivison, the clear leader on the F-35 story for months, the Super Hornet has far less of a cost advantage than the JSF’s critics have led the public to believe. In fact if Canada were to buy the two-seat electronic warfare variant of the Super Hornet or a mix of that model and the attack version, it might not be cheaper at all.

The “life cycle costs” of the F-35 — development, acquisition, sustainment, operations, attrition and disposal, including fuel and air and ground crew — have been described in Canada in apocalyptic terms. Here, the analogy to a car purchase is apt. When you buy a car for $30,000, you’re paying for the development of that car, a profit for those making it, and for the car itself. Few people budget for the fuel, maintenance or insurance costs over the vehicle’s “life cycle.” But they know keeping the car on the road for ten years will cost roughly double the purchase price. Since we buy military equipment for longer life cycles — in this case 42 years from 2010, although the international standard for measuring this has usually been 20 years — those costs increase in step. Hence, misleading headlines such as that the “F-35 costs five times original estimates.”

Nor have fair cost comparisons been done with other big government-funded enterprises such as the CBC, which as Sun Media has noted, will have cost taxpayers more by 2052 than whatever new fighter jets Canada eventually purchases.

Also lost in the hullabaloo over life cycle costs was that number crunching by KPMG that was presented to Parliament last week indicated that cost estimates prepared several years ago by National Defence were accurate.

Those same arguments have been made on this blog many times. The critics essentially have taken a hypothetical cost that has never been used before for any weapons system (and certainly not over the span of years used to conjure this particular cost) and have declared the F-35 "unaffordable".

Yet when one objectively assesses cost it is clear that the 4th generation alternatives, which still don't begin to produce the same capabilities and advantages the F-35 brings to the game, may cost as much or more than the F-35 when all is said and done.

Anyone with experience with these sorts of things has begun to note that critics have essentially gone into narrative mode. They have a narrative, formed early and stocked heavily with misinformation, that they continue to push, despite overwhelming evidence of progress on all fronts for the program.

Look at these numbers:

According the U.S. Department of Defense, Boeing’s Super Hornet costs $88 million per aircraft, which is identical to KPMG’s estimate for a F-35. According to Australian reports, the latest batch of Super Hornets that Canberra may buy will cost more than $100 million each.

Britain’s Ministry of Defence lists the Eurofighter Typhoon at $115 million per aircraft. France’s Rafale costs from $80 to $120 million each depending on the model. Sweden’s Gripen E was just purchased by the Swiss air force for $100 million per plane.

As reported yesterday, this latest batch of F-35s contracted will cost around $107 million each. And, again, those are costs represented in low production rates. Once full scale production is approved and the expected economies of scale kick in, those costs should drop well below the $100 million mark.

Thanks for following this. I've been seeing the hyperbolic headlines and suspected the collusion between leftist press and pols to change the $'s being counted to make it look bad when it wasn't. Hardly surprising, as this is the kind of cr*p POGO and friends has used to conflate cost numbers in the American public discussion as well. These people really are despicable.